Hong Kong to Limit Retail Investors’ Crypto Trading Assets

The crypto market, as most individuals know, can bring quick profits, but in addition cause steep losses in a short while. Entities and firms attempting to adopt this technology know this and since of that, they should put the buyer’s protection in mind.

In today’s news, Hong Kong is setting a plan to prioritize consumer protection by limiting retail investors to only trading “Highly Liquid” Crypto Assets. This information was disclosed on the Asia Financial Forum on January 11.

Hong Kong To Shortlist Crypto Assets For Retail Investors 

In keeping with Securities and Futures Commission (SFC) CEO Julia Leung Fung-yee, Hong Kong watchdogs are making significant moves to bring crypto regulation to the region. A part of it’s shortlisting crypto assets to permit retail investors to trade only “highly liquid” assets with a licensing law. 

As well as, Leung said on the Asia Financial Forum on Wednesday that the SFC will issue a consultation paper later this quarter that may give more details on products and conditions for retail investors to trade in virtual assets. Alongside that, the SFC will release guidelines for the licensing requirements for virtual assets exchanges. 

Leung further emphasized the limitation of allowing retail investors only trade specific assets. “Some virtual assets platforms have over 2,000 products, but we don’t plan to permit retail investors to trade in all of them. We are going to set the standards that will allow retail investors to [only] trade in major virtual assets,” said Leung.

Leaving out exclusive details, Leung didn’t give any list of which particular crypto assets will make it to the shortlisted crypto tokens for retail trading. Nevertheless, Robert Lui, digital asset leader at Deloitte Hong Kong, hinted that the SFC might select the highest 10 or 20 most liquid virtual assets for retail investors to trade.

Hong Kong Keen On Crypto Regulation 

Moreover, as a component of its interest in investor protection, the SFC also goals to manage crypto exchanges expressing that the regulation would require exchange platforms to have internal controls, risk management, and proper custodian arrangements to safeguard clients’ assets. 

Leung said, “If there are proper regulations in place, then the likelihood of an FTX-type collapse won’t occur in Hong Kong.” Besides crypto regulation, Leung further disclosed the SFC plans to make sure Hong Kong is a green financing hub. 

She stated that the SFC would work with the Hong Kong stock exchange on a separate consultation later this yr to discover climate disclosure risks faced by listed firms. While the necessity for crypto regulation has surfaced, the crypto market still goals for global adoption.

Total cryptocurrency market cap price is moving sideways on the 4-hour chart. Source: Crypto TOTAL Market Cap on TradingView.com

The worldwide cryptocurrency market capitalization has made some significant moves over the past few days and currently sits at $845 billion on the time of writing.

Featured image from Unsplash, Chart from TradingView.com

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